Don't Mess With Taxes

Fortune cookie tax filing wisdom (Photo by Kay Bell)

We’re into the second official day of the 2025 tax season and millions of taxpayers have already filed their returns. This post is not for you.

It’s for folks who haven’t yet even thought about their 2024 tax year returns. That’s okay. We all work at our own pace.

But there actually are some good reasons to get to your annual tax filing task sooner rather than later.

Here are 10.

1. To get your federal tax refund sooner.
This is the main reason early filers get their 1040 forms to the Internal Revenue Service as quickly as they can. The absolutely best way to accomplish that is not only file as early as you can — that its, when you’ve got all your tax documents needed to accurately fill out your return — but to also file electronically and tell the IRS to directly deposit the money into a bank or other financial institution account. That should mean your refund will show up in that account within 21 days of processing.

2. To work on your state taxes.
I live in Texas, one of the handful of states that doesn't impose any type of income tax. But most Americans have to also file state tax returns in additional to their federal 1040s. In most of these tax-collecting states (and the District of Columbia), your federal return is the foundation for filing your state and local taxes. The sooner you finish your federal return, the sooner you can tackle your state and local tax filing counterparts, and get any refund you might be due from those tax jurisdictions.

3. To beat tax ID thieves to the punch.
The IRS and its Security Summit partners have made good progress in recent years in reducing tax identity theft and associated tax refund fraud. But the crooks are still out there. You can preempt them by filing before they do. When the IRS gets your real Form 1040 first and is done with it, any tax ID thieves who try to file under your name and Social Security number will discover that you beat them to the tax punch!

As an added protection step, especially if you can’t get to your 1040 as quickly as you’d like, consider using an Identity Protection Personal Identification Number, or IP PIN, to further thwart would-be ID thieves. Any taxpayer can apply for this special six-digit code, which the IRS uses to verify that it is indeed you who has filed your tax return so it won't accept any electronic return subsequently filed in your name.

4. To track down missing tax documents.
You might have noticed the mention in reason #1 of tax documents needed to accurately fill out your return. If your tax life is relatively simple, that’s usually a Form W-2 and a few documents related to savings, and perhaps your home ownership tax-related expenses. But if your tax life is more complicated, you probably get a slew of tax statements. When you at least start working on your taxes early in filing season, you get an idea of what documents you’re missing. This is particularly true of filers who are self-employed, even if it’s just side gigs. (My 1099s are inordinately slow in arriving this year!) By knowing where your tax data stands early in filing season, you have time to do some follow-up and avoid scrambling to get these statements as Tax Day nears.

5. To figure out how to pay what you owe.
Most folks who put off filing do so because they know they owe taxes. But filing early actually can help in this situation. The sooner you fill out your Form 1040, the sooner you'll know exactly how much you owe the U.S. Treasury. Then you'll have time to figure out how to come up with the cash.

Do you need to raid an emergency savings account? Or borrow from a family member? Or put it on a credit card (don't forget to take those fees and interest into account!)? You also can explore the IRS' various extended payment options if you can't come up with the full amount at once.

Those payment decisions are separate from your filing. You aren't required to pay your due taxes when you file; that payment can wait until the actual Tax Day due date, which this year is on April 15.

6. To talk with a tax professional.
You started working on your tax return early and discovered it's not as easy as you had hoped. Since we're just at the start of the filing season, you have some time to find professional tax help.

Of course, when you do hire a reputable tax preparer, the actual early filing of your Form 1040 is likely off the table. Tax pros currently are working with clients who came to them well before filing season started, so you're going to the end of the line. But at least you realized you needed help early and are in the system.

But you might get a bit of price break since it's still early in the tax season. Most tax preparers will charge new clients more if they come for help as the filing deadline nears.

7. To get your tax information into the system.
Big life events usually involve money, such as a home mortgage or assistance in paying college costs. And those funding sources typically want to look at your tax returns to verify the entries on the loan documents. Getting your return in early can help ensure those loan (and other tax-related) transactions go as smoothly as possible. The tax paperwork will help you more easily answer any lender or financial aid questions, and the tax paperwork will substantiate your financial requests.

8. To get your entire financial life off to a good start this year.
Financial advisers recommend we all evaluate our financial situations at least once a year. The start of a new year, when you’re already gathering information to file your annual tax return, is a good time to do that. You’ll get an idea of not only your finances, but also how they are affected, for good or bad, by taxes. Which brings us to the next reason to file early.

9. To clear the 2024 tax deck and start focusing on 2025 taxes.
I know, you just want to be done with your current Form 1040 and be done with taxes. break. If only. As noted in reason #8, there are lots of regular tax matters that continue throughout the year.

Take, for example, your paycheck income tax withholding. Maybe your review of your finances convinced you to adjust your withholding so that you get more money each pay period instead of overwithholding and having to wait for a tax refund. You also can see where you might need to revise, when and where you can, your participation in and contributions to tax-favored accounts, such as workplace 401(k) or IRA retirement plans or health related plans such as a health savings account (HSA).

With your past tax year obligations met, you can focus totally on necessary 2025 tax year actions, some of which show up every month in — shameless plug alert! — the ol' blog's upper right column as tax tips. And yes, this post will be part of the January Tax Tips collection.

10. To reduce tax-related stress.
Even when your taxes are simple and you know you got your filing right, most taxpayers still feel added anxiety when it comes to this annual task. That's why tax time surveys always include outrageous things people say they'd rather do — serve on a jury, swim with sharks, have a root canal, be celibate for the rest of tax season — than file their taxes.

So what are you waiting for? Get this daunting task done sooner by filing your taxes yourself or turning the task over to a paid tax professional. Then go and spend your more stress free time doing things you enjoy!

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